EDITORIAL: We're not 'insulated' after all

Published: Tuesday, January 21, 2014 at 03:32 PM.

The layoffs at L-3 Crestview Aerospace knock another hole in one of Northwest Florida’s money myths — the notion that defense spending makes this region immune to the ups and downs of the national economy. If something bad happens elsewhere, it won’t happen here.
Once upon a time, everybody seemed to believe it. In 1998, a fellow whose firm made electronics for the government told the Daily News our area was “insulated” — that was his word — from economic ills.
In 2001, a business expert stated: “Military spending insulates Okaloosa County and the surrounding counties from the business cycle. When the rest of the country is in a recession, we often don’t see it here.”
After the economic meltdown of late 2008, of course, we saw it plenty.
As the nation’s unemployment rate rose, so did Okaloosa County’s.
As businesses failed and families struggled, the same things happened here.
And as the housing market reeled, Northwest Florida felt the punches, too.
Housing was the focus of a meeting last week on Okaloosa Island. At the gathering, Lawrence Yun, chief economist for the National Association of Realtors, made a sharp observation. When it comes to real estate, he said, the Emerald Coast is remarkably dependent on how other parts of the country are doing.
“If the other markets do well,” Mr. Yun said, “then you will do well, with some time lag. If Nashville is doing well, people in Nashville will want to buy second homes here.”
We’re not so “insulated” after all.
Just days later came another reminder. L-3, one of Okaloosa County’s largest employers, laid off more than 10 percent of its staff. About 100 people lost their jobs.
The reason: reductions in defense spending. As the economy wheezes, the Pentagon tightens its budget, with ripple effects on regions where defense spending is a key to prosperity. Regions like ours.
Our thoughts today are with those who’ve lost work at L-3. Let’s hope that as the nation’s economic health returns, so will people’s livelihoods.

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The layoffs at L-3 Crestview Aerospace knock another hole in one of Northwest Florida’s money myths — the notion that defense spending makes this region immune to the ups and downs of the national economy. If something bad happens elsewhere, it won’t happen here.
Once upon a time, everybody seemed to believe it. In 1998, a fellow whose firm made electronics for the government told the Daily News our area was “insulated” — that was his word — from economic ills.
In 2001, a business expert stated: “Military spending insulates Okaloosa County and the surrounding counties from the business cycle. When the rest of the country is in a recession, we often don’t see it here.”
After the economic meltdown of late 2008, of course, we saw it plenty.
As the nation’s unemployment rate rose, so did Okaloosa County’s.
As businesses failed and families struggled, the same things happened here.
And as the housing market reeled, Northwest Florida felt the punches, too.
Housing was the focus of a meeting last week on Okaloosa Island. At the gathering, Lawrence Yun, chief economist for the National Association of Realtors, made a sharp observation. When it comes to real estate, he said, the Emerald Coast is remarkably dependent on how other parts of the country are doing.
“If the other markets do well,” Mr. Yun said, “then you will do well, with some time lag. If Nashville is doing well, people in Nashville will want to buy second homes here.”
We’re not so “insulated” after all.
Just days later came another reminder. L-3, one of Okaloosa County’s largest employers, laid off more than 10 percent of its staff. About 100 people lost their jobs.
The reason: reductions in defense spending. As the economy wheezes, the Pentagon tightens its budget, with ripple effects on regions where defense spending is a key to prosperity. Regions like ours.
Our thoughts today are with those who’ve lost work at L-3. Let’s hope that as the nation’s economic health returns, so will people’s livelihoods.